SandRidge Energy, Inc. announced that the Board of Directors has named James Bennett CEO and president, and that lead independent director Jeffrey Serota will serve as interim non-executive chairman, effective June 19, 2013. SandRidge also announced that Tom Ward, the former Chairman and CEO of SandRidge, is leaving the company.
"After evaluating James' performance as president and his two and a half years as our CFO, we believe that with his extensive industry and financial expertise, as well as his leadership qualities, he is the ideal choice to lead SandRidge," said Serota. "The Board unanimously concluded that an external search was unnecessary and not in the best interests of the company as the Board has full confidence that James will provide excellent leadership to a talented management team and workforce, focus the company on transparency, meeting or exceeding expected results, capital discipline and creating sustainable returns."
Bennett has served as chief financial officer of SandRidge since January 2011 and was promoted to president in March 2013. Prior to joining SandRidge he was managing director for White Deer Energy, a private equity fund focused on the oil and gas industry. From 2006 to December 2009, Bennett was employed by GSO Capital Partners, where he served in various capacities in its energy group, including as a managing director. His prior experience also includes serving as chief financial officer of Aquilex Services Corp., a First Reserve portfolio company, and as an investment banker in the energy group of Donaldson, Lufkin & Jenrette (now Credit Suisse). He started his career at NationsBank.
Bennett graduated with a Bachelor of Business Administration degree with a major in finance from Texas Tech University. He has served on the board of directors of the general partner of Cheniere Energy Partners L.P. and PostRock Energy Corporation.
Bennett replaces Ward, who founded the company in 2006 and has served as chairman and CEO of the company since it was founded. The Board's decision to replace Ward reflects its judgment that, despite Ward's many contributions to SandRidge, new leadership is in the best interests of the company and its shareholders at this time. "On behalf of the Board, I want to express our appreciation of Tom's leadership and vision, which led to the founding and growth of SandRidge," Serota said.
The company also announced that the Audit Committee of the Board of Directors has completed its previously-announced independent investigation, which was prompted by allegations of improper related-party transactions in oil and gas properties in the Mississippian play. The four-month independent investigation was conducted by Mayer Brown LLP, an internationally recognized law firm, and included the review of hundreds of thousands of documents and the interview of more than 40 persons. After reviewing the facts developed during the Audit Committee's investigation, the non-employee members of the Board unanimously determined that such did not merit a termination for cause. The termination of Ward's employment, which reflects the Board's decision that new leadership is desirable at this time, will accordingly be "without cause" under the terms of his employment agreement. He will receive the severance package provided for under the terms of his employment agreement, which consists of: the vesting of 6,331,475 shares of previously granted restricted stock; a lump sum cash payment of $53.5 million, comprised of three times the average of his last three annual bonuses, his accrued vacation, and the value of the restricted stock that Ward would have received over the next three years if his employment with the company had continued; and his current base salary to be paid for a period of 36 months.
Bennett commented, "As we begin a new chapter in the company's history, we are focused on keeping our talented team motivated, enhancing our communications, and delivering on expectations by efficiently executing on our assets. We are confident this will result in value creation for all stakeholders, including our stockholders, employees and the communities in which we operate."
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